Saturday, April 14, 2007

Rivalry

There is a clear and present rivalry between the UAE's two great city states. I have noticed this since first coming to the UAE 7 years ago. Some natives or other old-timers may be able to shed light on how far back it goes.

It is actually quite understandable that such a rivalry exists, although I am less certain of how healthy it is. You have on the one hand the capital, with all its wealth derived in a sense effortlessly from its vast supply of petrochemicals. You have on the other hand the other city, with such a go-get-it attitude that it is easily able to match the wealth and success of the other.

Of course I speak of Abu Dhabi and Dubai, respectively. It is interesting to see this rivalry played out, and for me it has always been so much easier to side with Dubai over Abu Dhabi. My preference, of course, has its basis in my own particular likes and dislikes, but it is fair to say that Dubai, in its need to develop beyond its natural limitations, is a much more open and inclusive sort of place.

In Abu Dhabi there is, one might say, little to do but rest on one's laurels. At the same time, Abu Dhabi has succeeded at making the most of its resources, not squandering them as have other resource rich provinces and countries in the world. It has also shared its bounty with the neighboring emirates, including Dubai, and even with other countries. In this regard, if it were only a tale about Abu Dhabi, then it would read as a great success story.

Dubai however has, out of necessity, pursued its own course, with such revelry that Abu Dhabi has had to take notice of it--not the other way around. The recent freehold property phenomenon is one of the best examples of this. Dubai made its first tentative steps to introduce freehold in 2002. In no time it proceeded to grow this strategy to such an extent that it has become the new model of redevelopment for the whole GCC region.

Abu Dhabi waited and watched from the sidelines for perhaps how and when to answer what amounted to a new challenge from Dubai. Inevitably it did what it probably had to do. Abu Dhabi jumped onto the property bandwagon. Of course, it could not be seconded by Dubai, so it announced its own equally grandiose schemes.

It is not only the freehold model that Abu Dhabi has taken up in response to Dubai's earlier moves. The emirate has recently announced the planned establishment of its first freezone--something with which Dubai has had great success since the mid-1980s. Retail, tourism, infrastructure development... the list goes on of changes coming to Abu Dhabi which would seem to have got their start in Dubai.

So What?

What does it matter anyway that such a rivalry exists? For one, it highlights the differences between the two cities. It also reveals each city's strengths and weaknesses. Abu Dhabi by its attempts to one-up Dubai has made its own missteps all the more apparent. Its answer to the Burj Al Arab, for example, is the Emirates Palace Hotel. While both are over the top grandiose, the Burj Al Arab seems to genuinely serve the requirements of the international luxury travel market while the Emirates Palace seems more a superfluous symbol of government extravagance.

I see a parallel in the two freehold property markets as well. Dubai's if we build it they will come strategy appears to have some basis in reality. They are, in fact coming--Brits for that vacation home in the sun, Iranians for a safe haven, Russians for a combination of the two--and more will come due to Dubai's already established reputation for openness and progressiveness. Abu Dhabi's plans to do the same in property development seem more like the proverbial pie in the sky. In fact, a more apt axiom for Abu Dhabi would be, we can build so we will, whether they come or not.

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1 comment:

Steve Beauregard (REGARD Solutions Corporation) said...

Thanks for the insightful summary. I am an American entrepreneur potentially coming to Dubai to develop practice to server telecom companies in the region. Thanks in advance for any additional tips.